Developers Say Northeast DC Is Ripe For New Multifamily
Looking at DC's multifamily numbers as a whole might make developers hesitant to launch a new construction project, but Urban Pace president Matt Dewey says focusing on specific submarkets in Northeast DC could yield success.
"What we've seen in the past 24 months, is there was always a big difference between Northwest and Northeast DC, now there’s almost no difference at all," Matt said Thursday at Bisnow's Multifamily Annual Conference. "People are pushing east, the boundaries are ever growing. If you’re open to different areas from a development standpoint, I think there’s still a lot of money to be made."
With the recent multifamily development boom likely nearing its end, Matt says the cost of starting new construction in many Northwest DC markets, like 14th Street and Shaw, can be too high, but starting a project in Northeast is still viable. When CohnReznick's David Kessler asked what specific submarkets he likes the best, Matt pointed to NoMa and H Street NE.
"That has basically the most heat in terms of residential development," Matt says. "There’s already the infrastructure and apartments there, there’s retail that's attracting people as well and you have the marketing of the whole city behind it. "
Over on H Street, Rappaport began construction this summer on its 419-unit H Street Connection mixed-use project. MRP Realty and Kruger recently announced plans for a 112-unit apartment building at 315 H St NE, one of the last remaining vacant sites on the corridor.
Matt is also bullish on the condo market in Brookland, which he says is poised for a strong second round of development in the next two to four years.
"We see young families move there, begin to take up the single family stock, there are apartments that have gone in close to the Metro," Matt says. "We recently sold a building with larger two- and three-bedroom condos, which is a very rare product type for condos in DC. That absolutely flew off the market...that's a ripe area."
One of the developers responsible for Brookland's recent success is Abdo Development's Jim Abdo, who sees the neighborhood as a model for transit-oriented placemaking.
Abdo partnered with Bozzuto and Pritzker Realty on Monroe Street Market, a 1M SF, $200M mixed-use project just south of Catholic University's campus near the Brookland Metro. The project's first phase delivered 562 residential units in 2013, which filled up in just a few months.
"That was an interesting project right on top of Metro, vacant land," Jim said. "We said 'what kind of amenities need to be here to make this work? What is lacking not just for the community, but also for the university?'
"We developed a project there that created an arts walk, it created a retail main street that never existed there and it created a substantial amount of market-rate housing," Jim said. "And it worked, it worked great."
Jim said one of the keys to Brookland's success was finding local restaurants that bring more character to the neighborhood than a typical chain. Jim points to this same strategy as the spark that has ignited some of DC's most popular corridors.
"It has made corridors like 14th, H Street, really a sought-after destination retail for the city," Jim said. "It wasn’t from sticking credit tenant franchises in there, it was getting eclectic retailers to buy into a vision."